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For the past few weeks, I have been playing with the following argument. Tell me what you think:

In the past year, fuelled by Trump’s fiery rhetoric as well as the left, a lot has been said against trade, especially framing it as the cause for the decrease of manufacturing jobs in the United States or Canada. But the truth is, trade played a much lesser role than decades of efficiency gains due to automation and information technologies. Although most of us do not realize that fact, the US has never produced as much industrial goods as they do now, with the big difference being that they produce all of it with less workers than before.

Let us consider the following abstract case:

20 years ago, 200 workers built 200 tractors.

Now, because of efficiency gains, 150 workers are able to build 210 tractors, while the other 50 workers are fired.

The most recent issue of Res Publica features a collection of articles on social insurance and the welfare state, a topic near to my own heart. It was recently featured by Bookforum under the heading The Greatness of Modern Welfare States. I thought I might say a few words on this paper (ungated here) by Xavier Landes and Pierre-Yves Néron (two of my former postdocs, I should mention). Much of the discussion is a response to this paper of mine (which is actually just a more academic presentation of an argument developed in my book, The Efficient Society), in which I basically present a philosophical defence of that standard “public economics” view that the major role of the modern welfare state is to correct various forms of market failure. Much of this activity gets misclassified, however, as “redistribution,” suggesting that it follows some sort of an egalitarian logic, when it fact it is just an insurance scheme being run in the public sector, and is therefore no more redistributive than any other sort of insurance.… Continue reading

It’s curious that complaints about the egregious behaviour of the Canada Border Services Agency (CBSA) get so little traction. I wish there were a sophisticated, multi-faceted, complex explanation for this, but having watched the press on this for almost a decade, I think the explanation is pathetically straightforward: the CBSA deals mostly with foreigners. Sure, the Agency does a few bad things, a few human rights abuses and arbitrary exercises of power, but the broadly defined ‘we’ group is essentially willing to ignore this – or at least put up with this – in exchange for the sense of security that an armed border guard gives us.

Today, in my regular pursuit of near futile causes, I’d like to highlight just two things, to serve as a reminder that CBSA practices are quite far from the norm of what ‘we’ typically will tolerate from armed state officials and jailers in Canada.… Continue reading

Today the Supreme Court of Canada handed down an important decision about refugee claimants with criminal records.

Obviously, that’s a tough sell. With so many people in the world whose basic human rights are not protected by their home states (about 15 million at last count), advocating for the tiny subset of refugees who have been convicted of a crime is not easy.

The arguments in their favour, however, are familiar to us, even though they come with an echo of a kinder and gentler time. There are two principal reasons why we forgive criminals: rehabilitation and atonement. That is, our criminal justice system echoes these two ideas at many levels. A commitment to rehabilitation means believing that people can change, and can return to being productive members of society. A commitment to atonement means that we embrace that idea that those who have ‘done their time’ or ‘paid their dues’ should be free to resume their place as members of society.… Continue reading

Those who use simple heuristics to make up their minds about policy questions (e.g. “government good, markets bad”) will undoubtedly already know how they feel about the federal NDP’s recent announcement of a bold new plan for a national daycare system. The headline feature of the system is that it will be subsidized, so that the cost to parents should come in at about $15 per day.

There has of course been a sense of welcome relief that the NDP has stopped doing small-bore, pseudo-populist politicking, and is actually coming forward with a genuine proposal to expand the Canadian welfare state, moving it away from the American toward the Scandinavian model. But if you look at the issue from first principles, or from a social justice perspective, public involvement in the daycare sector is not an easy issue to assess. In this respect, it is not like the other two “big fish” out there in the policy space – carbon pricing and national pharmacare – which are no-brainers by comparison.… Continue reading

For those who haven’t been following these things, our current Toronto mayor Rob Ford has dropped his bid for re-election and his brother Doug has taken over for him. How much of a difference this makes remains to be seen. One might be tempted to say that there’s no real difference between the two, just six of one, a half-dozen of the other. That’s not entirely accurate, it’s more like schlemiel, schlemazel.

Anyhow, Doug Ford (aka “schlemiel”) has been sticking fairly closely to the “post-truth” playbook, essentially saying whatever sounds best, in a way that shows total disregard for the norm of truth. Yesterday though he announced a genuine policy commitment, which is to reduce Toronto’s land transfer tax by 15% per year for 4 years. Reducing this tax is something that his brother Rob (aka “schlemazel”) campaigned on four years ago, and failed to gather enough support on council to implement.… Continue reading

It is not unusual to hear Canadians, from all the provinces, including some on the right in Quebec, complaining that fiscal federalism disproportionately benefits Quebec. Central in such concerns is the view that the equalization program allows Quebec to ship the costs of its social programs to the richest provinces, mostly Alberta, and keeps Quebec in a state of economic dependency.

The equalization payment program is enshrined in the Canadian constitution in section 36 of the 1982 Constitution Act, which states that: “Parliament and the government of Canada are committed to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation” (Subsection 36(2) of the Constitution Act, 1982).

Hanging out in the dog park, chatting with a neighbour in my fancy Toronto neighbourhood the other day, asked a question about the local public school, where his kids attend. “Oh no,” he says, “they don’t go there anymore.” And now here comes the kicker:

We have them in boarding school, in the Cayman Islands.

How exactly do you respond to that? “Uh-huh,” is the best I could come up with.

It is clever. You have your offshore account, with presumably a lot of money in it that you presumably haven’t paid tax on. In order to spend it, you need to get it back to Canada, but that’s hard to do without attracting some attention from the CRA. Boarding school in the Cayman Islands is the perfect solution. That way you can take your money, convert it to human capital, then smuggle it back into the country in the form of your own child.… Continue reading